entrepreneurshipI’m looking to be an entrepreneur and owning my own software business. Meaning every time the company makes money, I get to decide whether to put it in my pocket or back into the business.
Recently someone contacted me on cofounderslab.com (a website to find other founders). However, she said she has funding from Y combinator. Does that mean this is basically a lead engineer full time salary position? Meaning I don’t get a split of the profit and the only way for me to make bank is if there’s an IPO or someone acquires us?
Sure I get more “equity” and salary, but it just feels like I would take a pay cut to work for another business. I know the opposite of this is going into a venture where I will probably not get paid anything but at least when the company makes money, I get to decide what to do with 50% of it (given I have 1 other cofounder), so I wonder if joining a super early stage startup has the advantages of being a business owner or if its just a salary position with a bunch more responsibilities.
You will need to contact the person that invited you to join and ask her what the details of her offer are.
There is nothing “standard” about the situation you describe. The details are all in her head. So that’s where you must go to get your answer.
One point worth noting is that the funding is a double-edged sword. The positive is that the business has enough cachet to attract financing. The drawback is that you will have little to no ability to achieve your stated goal:
…every time the company makes money, I get to decide whether to put it in my pocket or back into the business.
Because your co-founder, the board and, ultimately, the shareholders will make those decisions.
Its not the founders of the company that get to decide what happens with the money. Its the owners of the company. The owners are the people that have shares.
Now normally the founders will have equity (and in the beginning they will have it all). But if somebody is funding you, what they are doing is buying some of your equity so you will no longer get to make those important decisions all by yourself.
BUT: They are paying you up-front (so you get the money now rather than having to wait for the profits). So less decision power later more cash now.
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